Court Revives Kaiser’s Patent Fraud Claim

(CN) - Kaiser Foundation failed to prove that Abbott Laboratories and Geneva Pharmaceuticals violated antitrust laws, the 9th Circuit ruled, but the foundation can proceed with the claim that Abbott defrauded the U.S. Patent and Trademark Office.

Kaiser sued the two drug companies after Geneva's entry into the market for the hypertension drug Hytrin caused the price of the drug to drop from 70 cents to 10 cents per tablet.

Abbott paid Geneva $4.5 million to keep its generic version of the drug off the market. Abbott made a similar arrangement with another drug company called Zenith, in exchange for $3 million every three months.

The trial court ruled that Kaiser did not suffer damages from the delay in Geneva bringing its product to market.

Judge Fletcher of the San Francisco-based federal appeals court affirmed the decision, but reversed dismissal of Kaiser's charge that Abbott unleashed a hailstorm of frivolous lawsuits to delay the entry of generic versions of the drug into the marketplace.

The lower court will have to decide that issue, and whether Abbott intended to deceive the U.S. Patent and Trademark Office. Kaiser claimed Abbott left out material information from its patent application.

"We believe that Kaiser presented sufficient evidence to get to the jury on whether the failure to include the English translation of a (Japanese patent) reference enabled Abbott to obtain a patent that it would not have otherwise obtained," Fletcher wrote.

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